SMEs and micro firms sinking together with south Eurozone

(L-to-R) Fernando Medina, Vice-Mayor of Lisbon, Alexandre Lourenço, the Portuguese child that won the Galileo Drawing Competition, Nuno Crato, Portuguese Minister for Education and Antonio Tajani, Vice-President of the European Commission in charge of Industry and Entrepreneurship. The Commissioner travelled to Lisbon to help Portuguese SMEs emerge from the downturn and help kick-start the Portuguese economy. He was accompanied by the representatives of about 150 European companies, who participated in more than 1800 bilateral meetings with Portuguese SMEs to form new partnerships and discuss opportunities for collaboration in key sectors of the Portuguese economy such as tourism, agriculture and the economy of the sea. The results will be felt, if at all, in the future. (EC Audiovisual Services 29/11/2013).

(L-to-R) Fernando Medina, Vice-Mayor of Lisbon, Alexandre Lourenço, the Portuguese child that won the Galileo Drawing Competition, Nuno Crato, Portuguese Minister for Education and Antonio Tajani, Vice-President of the European Commission in charge of Industry and Entrepreneurship. The Commissioner travelled to Lisbon to help Portuguese SMEs emerge from the downturn and help kick-start the Portuguese economy. He was accompanied by the representatives of about 150 European companies, who participated in more than 1800 bilateral meetings with Portuguese SMEs. The results will be felt, if at all, in the distant future. (EC Audiovisual Services 29/11/2013).

Only 0.2% of the non-financial companies are large (more than 249 employees), the rest are either micro firms (up to 10 employees, 92.5%) or small and medium enterprises (10 to 249 employees, 7.3%). Eurostat, the statistical service of the European Union, regularly publishes data on enterprises broken down by size classes, which provide information on the situation of SMEs within the EU’s non-financial business economy.

It found that nearly 40% of persons employed by non-financial enterprises in the EU28 worked for SMEs in 2011 creating an equal percentage of total turnover. The majority of EU28 enterprises were micro enterprises accounting for 30% of persons employed and 17% of turnover, while only 0.2% were large enterprises with 33% of persons employed and 44% of turnover.

Unfortunately, the business environment favours, in every respect, the large business groups and more so when it comes to finance. According to another survey conducted in the euro area by the European Central Bank (ECB) on the access to finance of small and medium-sized enterprises, the availability of bank loans deteriorated between April and September 2013 and the SMEs reported in net terms an increase in their need for bank loans.

In need of loans

In detail, the ECB stated that “Euro area SMEs reported a marginal deterioration in the availability of bank loans (-11% of respondents, in net terms, after -10% in the previous round). The survey results point to slightly increased rejection rates for euro area SMEs when applying for a loan (12%, up from 11%). The percentage of SMEs reporting access to finance as their main problem remains broadly stable (at 16%)”.

It’s not only that though; the ECB survey results also suggest that financing conditions for SMEs continue to differ significantly across euro area countries and are in general more difficult than those of larger companies. Rejections of loan demands are the name of the game in the worst hit countries. In Greece, Italy and Spain very few SMEs and micro firms dare to go to a bank asking for a loan, and of those that do dare, only a small percentage receive a positive answer.

No future without strong SMEs

ECB found that “in the period from April to September 2013, the net percentage of euro area SMEs reporting a reduction in turnover declined (-3%, compared with -11% in the previous survey period). SMEs in Germany contributed positively to turnover developments, as in previous survey periods, while SMEs in Italy and Spain contributed negatively… A high net percentage of euro area SMEs continued to report increases in labour and other costs (43% and 60% respectively, down from 47% and 69% in the previous survey period). In line with turnover and cost developments, euro area SMEs reported a continued decline in profits in the period from April to September 2013 (-25%, after -33% in the previous survey period) to which SMEs in Italy and Spain contributed strongly”.

As it becomes obvious, SMEs and micro firms in euro area crisis countries are doubly hit. Once by the fall of internal demand, and secondly by the fragmentation of the financial markets, depriving them from bank loans. This is an arrangement that cannot be tolerated any more. The future of those countries depends on the 99.8% of their companies and Germany cannot continue pretending that it’s ‘business as usual’…

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

With 10 million Yemenis ‘one step away from famine’, donors pledge $2.6 billion

Understanding of LGBT realities ‘non-existent’ in most countries, says UN expert

Illegal fishing plagues the Pacific Ocean. Here’s how to end it

GSMA Announces New Speakers for Mobile 360 Series – MENA, in association with The European Sting

Some truths about the coronavirus, according to the World Health Organization

Help African farmers cope with climate change threats, UN food agency urges

6 things to know about the General Assembly as UN heads into high level week

UN relief official in Yemen condemns ‘horrific’ attack on passenger buses

Harnessing the power of nature in the fight against climate change

We can solve climate change – if we involve women

There is no greater sorrow on earth than the loss of one’s native land

The UK remains in the EU until a new Brexit date is set

UN food aid to Yemen will fully resume after two-month break, as Houthis ‘guarantee’ delivery

UN human rights chief regrets closure of Burundi office following Government pressure

Will the three major parties retain control of the new EU Parliament?

This is where people work the longest – and shortest – hours

Nauru President warns of possible climate change ‘economic Armageddon’

Half of all violent deaths involve small arms and light weapons

A Sting Exclusive live from Brussels: Solheim’s consequential visit leading the world and the UN

Is there a de facto impossibility for the Brexit to kick-start?

Road to Brexit: the UK seeks early agreement on Data Privacy with the EU

Austrian Presidency priorities discussed in committees

Does upgrading our minds mean losing the spark of genius?

The world’s most expensive places to own a home

Draghi: ECB to flood Eurozone and the world with more zero cost money; risk of drowning in cash

MEPs agree on new rules to tax digital companies’ revenues

The world has made spectacular progress in every measure of well-being. So why does almost no one know about it?

10 predictions for the global economy in 2019

Dignified health for all who live here

Celebrating Gaston Ramon – the vet who discovered vaccinology’s secret weapon

UN Chief ‘strongly rejects’ Guatemala decision to expel anti-corruption body

How many more financial crises in the West can the world stand?

Guterres censures terrorist attacks in Nigeria, pledges UN ‘solidarity’

5 ways blockchain can transform the world of impact investing

ECB tied in the anti-monetary German ideology

Right2Water initiative: Is the Commission ready to listen to citizens?

Now is the time to seize ‘unprecedented opportunity’ of the Sustainable Development Forum, says ECOSOC President

The Junior Enterprise concept: Business & Education

G20 LIVE: “ISIL is the face of evil; our goal is to degrade and ultimately destroy this barbaric terrorist organisation”, US President Barack Obama cries out from Antalya Turkey

The punishment gap: how workplace mistakes hurt women and minorities most

The issues of practicing medicine in Pakistan

Making Europe’s businesses future-ready: A new Industrial Strategy for a globally competitive, green and digital Europe

How drones can manage the food supply chain and tell you if what you eat is sustainable

We need greater protection for our oceans. We can’t let politics stand in the way

MWC 2016 LIVE: Telenor CEO calls on operators to embrace Mobile Connect initiative

The EU Consumer Policy on the Digital Market: A Behavioral Economics View

COP21 Breaking News_09 December: List of Recent Climate Funding Announcements

Here are three ways blockchain can change refugees’ lives

UN chief welcomes South Sudan’s Unity government, lauds parties for ‘significant achievement’

Commission launches debate on more efficient decision-making in EU social policy

UN Envoy ‘confident’ deal can be reached to avert further violence around key Yemeni port city

Taxation: Commission refers Hungary to the Court for failing to apply the minimum EU excise duty on cigarettes

From rescue animals to electric buses, California is introducing bold new rules

Brexit: EP Group leaders support a flexible extension until 31/1/20

Coronavirus: the Commission mobilises all of its resources to protect lives and livelihoods

Parliament makes it easier to organise a European Citizens’ Initiative

Statement by the Brexit Steering Group on UK paper on EU citizens in the UK

MWC 2016 LIVE: Intel focuses on 5G “beyond the Powerpoint”

Medical students of today, technological doctors of tomorrow

These 4 Nordic countries hold the secret to gender equality

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s